An Increase in Inventories During 2022

question 123

Multiple Choice

An increase in inventories during 2022:

• A)will result in gross investment being higher than net investment by the amount of the inventory increase.
• B)should be ignored while calculating GDP for 2022.
• C)should be subtracted from GDP calculated for 2022.
• D)should be included in GDP calculated for 2022.

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Definitions:

FOB Shipping Point

A term that indicates the buyer is responsible for goods once they leave the seller's premises, including paying shipping costs and bearing the risk of loss in transit.

Record Revenue

The act of documenting the income earned by a company from its business activities during a specific period, following accounting principles.

Gross Margin Ratio

A financial metric that measures the difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Net Sales

The residual income from sales once deductions for returns, allowances for impaired or absent merchandise, and markdowns are made.